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Press Mentions

Ad Age: Why So Many Media Companies Stumble GloballyThe few news brands that have succeeded, to greater or lesser degrees, arguably include CNN, Bloomberg, People, Thomson Reuters, The Wall Street Journal, The New York Times, The Financial Times and The Economist. Other contenders are the Associated Press, the BBC, ABC, NBC, maybe CBS, National Public Radio, News Corp. and the top U.K. dailies, said Ken Doctor, the newspaper veteran who's now an analyst at Outsell. "If a news-media organization sees itself as covering the wider world, sees it as its foundation, that in and of itself differentiates it from all the local media -- newspapers, TV, radio -- out there," he said. "If, in addition, it has substantial reporting and editing resources, then it can play. The tough part is the part we're in: Who wins the race to ubiquity and can make it pay off?"

NYT: If The Globe Were Sold, What Price? “The best guesstimate of the real price: a buck. The best of an announced price: between $50 and $100 million,” he wrote in an e-mail message. The devil will be in the details of the obligations that a buyer would assume, he said, adding that “a buck essentially represents a gentleman’s agreement: I take a liability, headache and a distraction off your hands.”
He said that the Times Company could hang on to some pension liabilities or other obligations in exchange for a higher purchase price, a number that would give the appearance that it was getting something for the more than $1 billion it paid 16 years ago. He added that no bank would be interested in financing a deal given how other deals have blown up, so “the owner’s own money is immediately at risk.”

BizTimes.com: Journal Sentinel faces daunting choices“There’s no strategy – this is panic. What we’re likely to see this year (around the country) and what we’ll see in Milwaukee too is (publishers asking) how much they need to cut back and how much they can do to still hold their place in the market. For publishers, it’s about ‘How do we stay alive and stay profitable until we can get to some sort of breathing period?’ (Economic) recovery will not bring back their old business, but it will give them some breathing room.”

AP: Threat to shut Boston Globe shows no paper is safThe threat to close the paper "sends a very clear message to all employees and unions of surviving newspapers — that this is not business as usual. This is uncharted territory....Newspapers all "have a sword over their heads," said Doctor. If the industry wants to survive, he said, "everyone has to give some blood."

March 2010

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Tribune

January 18, 2010

Who will be next? And is the mating of banko companies
the look of the next year?

Dean Singleton bit the bitter bullet last week. After
staving off bankruptcy for all of 2009, telling MediaNews execs that the
company would not need to take that route, the company succumbed. MediaNews
is following Morris into bankruptcy, both taking the neater, pre-packaged route,
allowing quicker movement through the courts and, importantly, a continuity of
leadership.

Put together the long list of bankruptcies – Star-Tribune,
Tribune, Philadelphia Media Holdings, Journal Register, Sun-Times Group, Freedom,
Morris, MediaNews and some smaller ones – and you’ve got quite a chunk of
America’s dailies. With MediaNews – publisher of 55 dailies – joining the
second-largest US news publisher Tribune, industry guesses now turn to whether Lee, McClatchy
and Gannett can get to the other side, without a game board stop on the banko square.

That other side, of course, is murky itself, but expect it
to include more newspaper combos. Singleton, just as he was about to wheel his
hard-built company into court, told the Wall Street Journal that he wanted to
be the “aggressor” in the merger of newspaper properties. That’s an unlikely
statement from most CEOs taking their companies into bankruptcies, but it’s
pure Singleton irrepressibility [Excellent piece
by MediaNews alum Martin Langeveld on MediaNews’ spirited 25-year rise at
Nieman Lab]. After all, he and MediaNews president Jody Lodovic are set to
emerge from the bankruptcy maintaining their management of the company (through a special class of stock) and with a 20% ownership stake, as other equity shareholders
– including now-estranged, ex-partner Hearst, Skiffing off in its own direction, get nothing.

So imagine:

In the Twin Cities, the bankers who now own the
Star Tribune decide to throw in their lot with Dean. After all, he’s a
newspaper guy, and they’re not. Sure they’ve hired
a new publisher with intriguing cred, but do they really have the appetite for
a long-term turnaround?

In L.A., Tribune’s soon-to-be-owners similarly
may have little interest in staying the course. Maybe a L.A. combination, involving the Times around
lowered-cost, higher-efficiency publishing-- Singleton’s once and future trademark – is the way to go.

Anti-Trust, you say. Dean can find good attorneys to make
the case that it’s hard to see how bankrupt entities can dominate a
market!

For most of these companies, bankruptcy is just a re-set, a
way of buying some more time, as new managers or old ones try to come up with a
new strategy. Most of these companies bet on the come, taking on big debt, at
what turned out to be an imprudent time. Sure, Sam Zell’s move was laughable on
the face of it.The well-meaning
Philly and Twin Cities gambits were both cases of misunderstanding the bargains
the marketplace offered up. These weren’t distressed properties in a good
industry; they were distressed properties in a distressed and distressing
industry. For all, large debt is now seen as the anchor holding them back from a
fresh start.

The economics are fairly straightforward.

Recall a year ago when company after company had fallen into
a recession-ravaged operating unprofitability? Major staff, newsprint and
operating cost-cutting, and the easing of recession, got them back into the black,
month-to-month, many barely so. Yet debt service, once made possible by good
cash flows from existing and newly acquired properties, has become a major
barrier. Going-forward, within the new reality of the print-based news
business, it’s proven widely unsustainable to both maintain a large enough
business presence and pay off the debt. MediaNews will emerge with $165M in
debt, one-sixth of what it had on the books in December, producing a debt service
that seems much more doable. So,
even in 2010, the bankruptcies continue.

Given the harrowing last year publishers experienced – a
fifth of their business has disappeared in a single year, with little
likelihood of much of it coming back – 2010 feels
a bit better than 2009. Yes, it’s hard to know how accurate the feeling is.

Yes, this could be a plateau. Knocked down a couple of
notches, but standing tall on solid ground, dailies could move forward. Or it
could feel like a safe plateau and really be a ledge, a landing place offering
temporary comfort.

That’s the vantage point, partly obscured by rock and clouds
(the last visibility on budgeting was sighted around 2005, I think) as dailies
make a slew of vital decisions that will determine their fate. Call it the Fog of Media War. There’s precious
little wiggle room left, as publishers make such fundamental calls as:

Erect a paid content wall or not;

Bet on the tablet as the saving grace of the
time, and decide what that bet means they have to do;

Throw in their lot deeper with the winners of
the first-round news and ad aggregation, Google and Yahoo, or play them off
against the Apples, Sonys, Comcasts, Bloombergs and others making next-round
digital business moves;

Consort with Journalism Online, or Skiff, or
Microsoft, and/or re-direct the original consortium, AP

Re-consider the basics, and economics, of
content creation, as AOL-Demand-Helium-Associated Content-Examiner models upend
long-established notions of professional journalism creation.

As 2010 rolls out, that’s just the top of my list of the
real decisions that are in front of daily execs, in or out of bankruptcy. Tough
decisions, and ones better assessed from a broad Far West plateau on a
cloudless day, than on a ledge in the thick of a passing storm that’s left many
clouds on the horizon.

November 05, 2009

So the newspaper industry is taking a page from indie film ("A Day Without a Mexican"), dailies are hiring execs from the alternative press, and we're seeing new, almost-daily, mating rituals between older and newer news media.

What's going on? Nine questions to start:

How about a week without the Chicago Tribune? Yes, I know the idea is a week without the AP, but isn't the idea a bit behind the public's curve? The latest circ numbers showed that more than 40,000 readers have recently decided to go a week without the paper , down -9.72% to 465,892. It's telling that the Tribune company papers are going AP-less, but their websites aren't. That tells us that precious, and costly, newsprint will be used mainly for local news, but pixel-based newsreading will include the wider world. Which, of course, makes the formerly mass market newspaper a niche -- what happened locally yesterday -- and the web mass. Sam Zell's still on the AP board, which got some good news this week as 50 papers withdrew their "cancellations". (Back in my newsroom days, I always loved "advisory cancellations.") Here's guessing AP will be around in the news business lots longer than Sam Zell.

How do you put a new gloss on the Chron? It seems counterintuitive, but you improve the paper stock here and there, moving in some semi-gloss super-calendared paper. Sure, monthly high-gloss magazines are the only pubs failing faster than the daily press, but the San Francisco Chronicle's move seems a simple, and hardly earth-shaking, one. Christmas, I have on good authority, is still coming. Get some higher-profile advertisers, charge them a bit more than the cost of the better paper, and you have a few more profits. Pre-recession, both the New York Times and the Wall Street Journal -- now both new entrants for targeted Bay Area advertising, competing against the Chronicle -- were doing quite well with luxury ads. Luxe ads will make a comeback, and maybe the Chronicle's new offering will help. Besides, with daily circ down 25.8%, to 251,782, a little better paper costs a lot less than cheaper paper the Chronicle used when it had 525,00 daily circulation, back not long ago, in 2002.

Will alternative weeklies become yet another local competitor to the dailies? The alternatives have survived the recession better than the dailies, but curiously, they've not become big online players. Instead, the Yelps, Craigslists, AngiesLists and OpenTables -- among many others -- have moved into city markets. Now Village Voice Media -- the biggest chain in the country, with 10 bigger-city weeklies -- has launched the Voice Media Group, aggregating its own and other sites. As worlds blend together, the head of the alternatives' trade group, AAN, has just succeeded Scott Bosley as the head of the American Society of News Editors. Rich Karpel starts Dec. 1.

You think Pox News is bad, have you tried Headline News? So Sesame Street is taking a hit for taking on grouchy cable news. But Fox seems high like opera compared to the bad melodrama of CNN's Headline News (HLN). It's hard to believe anyone would pick the station, but many of us are subjected to it, me at the gym. Soundless, I watch its crawls with mouth agape. Yesterday, in just a few minutes: "Pregnant Woman Found Dead," and "This Just In -- Body at Rapist's Home Identified," repeated countless times. It ran with the Garrido case (kidnapper/child molester in Northern California) for weeks, with a headline about bones on adjacent property being checked to see whether they were animal or human, and whose. (Animal, of course.) Macabre, ghoulish, and I think far more hurtful to the watching psyche than the freak shows that talk cable has become. Recall that HLN (Headless News?) surpassed its big sister -- CNN -- in the last ratings cycle, where CNN , the nicest if least watched cable net, finished last.

How well will Dow Jones do with the upsell dance? Much "paid content" strategy at Dow Jones seems to smartly understand that it's easiest -- and cheapest -- to sell new stuff to the customers you already have, especially when many of those can charge it to the company store. So we have the upsell on WSJ Mobile, just launched, and now WSJ Pro. Pro is first being sold to enterprise users -- a new mix of two Dow Jones products, the WSJ.com and Factiva, a rich aggregation of news sources -- and in January, it will begin be offered to individuals.

Aren't we seeing new digital news versions of The Dating Game? You can't turn around without hearing about new combos. ProPublica and Marketplace on an investigation into University of Phoenix. The Center for Investigative Reporting and Frontline on a Carbon Watch initiative, led by the well-decorated Mark Schapiro. CBS and Global Post, tying up around global coverage generally. As the old arteries of high-quality content creation and distribution shrivel, new ones are being forged seemingly every day.

Will public radio grab the regional aggregation opportunity? Readers love aggregation -- from journos' daily check-in of Romenesko to everyone's use of the big news collections of Yahoo, AOL, MSN and Google. Newspaper and local broadcast companies, though, have been slow to make themselves regional aggregators. Now Minnesota Public Radio, beginning to make a move to assert itself as a major online news players, has picked up NewsBobber. Bob Ingrassia, a 15-year veteran of newspapers who is now leaving Internet Broadcasting as he takes NewsBobber to MPR, says it's a quite simple proposition: "How do people sort through it all?" He tells me he manages the impressive, month-old site in the morning and evening and has harnessed all kinds of cool, free tools to rank Minnesota sites and blogs. So think about it: once again, a guy does in his spare time what better-staffed media can't figure out.

Will the Chico experiment be the new chic?
It makes a lot more sense to try charging people in a non-metropolitan
market with far less competitive news media. So MediaNews' announced
pay walls in Chico and York, Pa will be worth watching. MediaNews'
Howard Saltz makes this point: "But we are
not giving away our premium content for free." The big question for the
Chicos, the Yorks and others: What will readers in fact consider
premium, and worth paying for? I've long thought that the smaller the
paper -- think weekly out in the hinterlands -- the greater chance to get
readers to kick in a few bucks extra for online access.

Is that Awl the news that's left to print? Sometimes a spreadsheet's worth more than a thousand words. Check out The Awl's circ charting, something that you won't see coming out of an industry association. But, take your vertigo pills first. Check out top newspapers -- from the Journal and Times to L.A. Times and Washington Post, and see what conclusions you draw.

August 19, 2009

Late midsummer brings hugely cautious optimism, and lots of identity guessing games -- who has Journalism Online signed?; what's Rupert really up to? -- worthy of William Shakespeare. Here's nine questions for the time:

1) Who are the 330 non-dailies in the Journalism Online semi-announcement? That's a big part of the guessing game, as reporters find
out that McClatchy, Dow Jones and Tribune are all saying they're not
participating. Speculation focuses on Gannett with its 850 non-daily
(weekly, niche+) publications in the US and its increasing online niche orientation,
using its Ripple6 engine. Or on Gatehouse, with its several hundred weeklies. Even MediaNews counts about a hundred weeklies. Or maybe the only announced partner
-- marketing-oriented Itz Publishing of Portland -- is bringing some
companies into the action. Far easier to get to "330" through a couple of
bigger companies than by one-offs.

Of course, the JO release was more of a tease
than an announcement. The numbers seem to be based on non-binding
letters of intent, which is kind of like asking publishers in a paid
content town hall discussion to raise their hands if they'd like new
reader revenue. Attributor, another player in this summer's intense
round of "paid" talks, also moved forward with many media companies, but did it without contracts or
even loi's. (Content Bridges: "Attributor "Fair Share Consortium"
Completes Newspaper Trifecta"). It
has obtained feeds from "50% of the top 25 U.S. papers" to test its
ad-monetization-of-piracy initiative. The key word here, for both: test.

If
it fact, the ability to charge -- and get paid
-- is based on having a good degree of proprietary content, then maybe
it is the weeklies who have a better chance of bundling print and
online than city dailies. Those that have websites or e-editions have
seen them mainly as print retention tools, or bonuses for snowbird
customers, Brian Steffens, exec director of the National Newspaper Association (2300
largely weekly members), tells me. He says that the about 42% of his
members' papers are paid, 6% free and and the rest some combo of the
two. I wonder if these paid papers -- which take in $20-50 in annual subs --
could tack on an online fee of 20% or so, and have it stick far better
than their daily counterparts.

2) Sure, Everyblock's code is still open-source (courtesy of the Knight Foundation), but doesn't its new owner MSNBC.com remind us it's still about location, location, location? The blinding simplificity of the Everyblock idea -- local city data routinized and made easy to use -- should have been one grabbed by newspaper companies. Local, local, local, right? While some operations, like the Sacramento Bee's Investigations Center and Mike Orren's Dallas start-up PegasusNews.com have gotten -- and acted on -- the value of local data, most newspaper companies still haven't. Yes, they can still use the open-source code, but with Everyblock innovator Adrian Holovaty working with MSNBC.com, does that give a non-newspaper company two legs up? At the same time, kudos to MSNBC's Charlie Tillinghast and Cory Bergman (himself a local online pioneer through Seattle's Next Door Media and more) for winning the prize. Now, let's see what they do with it.

3) Will GM's deal with car buyers mean that even more traditional
market dollars -- including newspaper print -- go away, as buyers and
sellers blissfully meet on eBay, cutting out a lot of middlemen? What kind of dent would that make in newspaper auto sector recovery expectations?

4) Hasn't Madeleine Brand, guest summer host for NPR's All Things Considered, been a breath of Left Coast (non-humid) air? Robert Siegel, Melissa Block and Michelle Norris are stalwarts, but it's been refreshing to have the easy-peezy feel she brings (for instance, "America: Prepare To Be Mightily Booshed,") even if her inclusion has been day-to-day.

5) Is "Do-Over" the coming strategy for newspaper companies? For the half-dozen US newspaper companies in bankruptcy, it's an official, court-approved do-over they are looking for, witness Brian Tierney's effort to shed some $300 million in debt in Philly as the papers seek to emerge from court supervision. He can make the case for a fresh start, building on the pride of downsizing: "Our performance has been incredible. We have
carved $95 million out of the cost structure of the paper in the past
three years." Meanwhile the Star-Tribune is about to jettison some $400 million of its half-billion-dollar debt as it emerges from bankruptcy. The bet in Minneapolis and Philly: recovering revenues may be sufficient to pay operating expenses, greatly reduced debt service and a bit of profit. It's a strategy that that McClatchy, MediaNews and the New York Times would love to follow as well, but they've all stayed out of the courts. The strategy, though, may be parallel: find some way -- property sales, long-term debt restructuring, new capital -- to segregate the large debt service that the business no longer will support.

6). Hasn't the Daily Mirror beaten Rupert to a punch? Murdoch's won great attention with his intention, his nod to a paid content future, and apparently is readying a new Sunday Times paid online product for November. In the meantime, Trinity Mirror, the third-largest newspaper group in the UK, has debuted Mirror Football. Take a look: it seems like the kind of full-featured (video, columns, blogs, visuals, data, and great use of archives) product that consumers might just pay a bit extra for, a newspaper version of a MLB or ESPN-like product. Says Sly Bailey, Trinity Mirror CEO: "The important thing for us is to develop the brand with the right
content that engages a passionate audience, and therefore to have a
diversified model that isn’t just about advertising. We think that is
the next stage, and whether over time that gives you the opportunity to
think about whether there are areas you can charge for, that's an open discussion -- but you have to create that content overall in order to have that option.” Exactly. Value first, then charge.

7). How many business news sites does the Wall Street Journal need? We got word Friday that the "The WSJ has placed at least three different ads seeking executive-level editors for a new business Web site." My guess is that Dow Jones, with the Journal, Barron's and Marketwatch, has sufficient brands deployed in the marketplace; in fact, I'd expected they would have niched and nested them better by now, almost two years into News Corp ownership. So my guess: new talent may be hired for niche sites, branded under some existing label, not a new one. WSJ's Alan Murray has already hinted at energy and CFO niches, no-brainers for a parent company skilled (through Factiva+) at B2B niching. The next logical move: greater regional business coverage in big business markets like Detroit, the Bay Area and Philly, which have all seen their own dailies cut back on business coverage.

8) How long will Legal Ads stay legal? The
news reader in me wants them to keep being published, and the taxpayer
in me cries foul. The Mercury News ran two pages of Legal ads in
microscopic text last week, btw too small for aging baby boomers to
read. Reading them is besides the point, though, anyway, right? It was
probably old English law that required a public display of legal
announcements, and that's carried over as a nice, little subsidy for
newspapering. How long will it be though until law catches up with
reality; instead of must-publish, must-Tweet?

9) Been down so long, looks like up to me? With apologies to Richard Farina, that's how I read Randy Dotinga's good report on new owner Platinum Equity's meeting with the staff. Revenues down more than 50% in three years. Coming: shorter stories and a move beyond Stone Age page assembly! One staffer's comment reminds me of staffers' optimism as Zell replaced Old Tribune and Tierney replaced Knight Ridder: [The new bosses seem decisive seem] "determined to not
sit around a table and wring their hands and debate endlessly whether
to proceed with one initiative or another." Alas, be careful what you wish for.

August 16, 2009

Update: MSNBC.com just paid several million to buy Everyblock, the much-watched Adrian Holovaty start-up, around local city data. Smart local interactive data should be a strong core of every local news(paper) site; it drives traffic and screams utility. The fact that MSNBC.com -- co-owned by Microsoft and NBC -- understands that opportunity better than newspaper companies speaks volumes. The deal also reinforces the notion, noted in the post below, that Microsoft will once again become a more dominant local, news-oriented player in the years ahead.

On Monday, Advance Internet is announcing its new partnership with Microsoft, an agreement that tells us a few things about the emerging, post-recession marketplace.

Advance Publications, Inc., isn't a well-known name outside the industry. Yet, it's one of the major media companies in the country, encompassing through Conde Nast more than 20 top-drawer magazines (The New Yorker, Wired, Vanity Fair, Gourmet+), the apparently immortal Sunday Parade, the 42-city strong American City Business Journals group and cable interests, in addition to its 30 newspapers. A very private company, Advanced is ranked 41st, by Forbes, among private companies in the country, taking in more than $7.5 billion.

So when Advance partners its online newspaper ad business with Microsoft -- when it zags when many of its peers are zigging -- it's worth taking note. The new partnership covers all the Advance newspaper properties, from Newark and Jersey City to Cleveland to Michigan to Portland, Oregon, with many in between. Advance Internet operates as a division, separate from the company's newspapers, but is set up to leverage all those papers' content and sales forces.

The new partnership -- already launched in part -- parallels the Yahoo Newspaper Consortium, but differs from it in one important respect.

What's the same:

Advance Internet's own salespeople, and then the vanguard of its
newspaper sales reps, will sell into the Microsoft Media Network,
encompassing all the Microsoft sites. So, in essence, Advance will
greatly expand what its sales teams can offer local advertisers. The idea and the centerpiece of the deal for Advance: the ability to offer local businesses additional marketing solutions, multiplying Advance's sales.

Advance Internet will use the capabilities of the Microsoft ad
technologies -- among them behavioral targeting (BT) and re-messaging
(following would-be customers as they move about the web)

The main difference: Advance Internet is maintaining its own ad platform, currently powered by 24/7 RealMedia, and integrating with Microsoft. Yahoo Newspaper Consortium members have fully adopted the Yahoo APT platform for their ad serving businesses, creating a closer, more exclusive relationship. "We wanted flexibility," Peter Weinberger, president of Advance Internet, tells me. Weinberger won't specify what parts of the deal involve exclusivity or the duration of the contract.

So, we can read the move in several ways:

First, Microsoft is really coming back -- to the newspaper world. After Sidewalk, after all kinds of attempted relationships, Microsoft -- soon to be half of the Google/Microsoft search duopoly -- is once again seeing the benefits of the newspaper company local connection. Advance Internet is
the first major local news company reselling display ads into the Microsoft
Media Network, Peter MacDonald, who is Microsoft's PubCenter Director of Business Development, Advertiser and Publisher solutions, told me. Haven't heard of the Microsoft Media Network? It was formed in February, rolled up from various Microsoft businesses, well-described here by ClickZ. Among the other big media companies named as collaborating on the new underlying PubCenter platform are IAC, Dow Jones Online, The New York Times Co., Time Inc., and Viacom.

With
the Advance deal, it gets good local sales potential -- those
feet-on-the-street that are the envy of companies that are
cubicle-bound and technology-centered. Recall that in the
Microsoft/Yahoo deal, Microsoft's Bing and paid search businesses will
power not only Yahoo, but apparently all the newspapers sites in the consortium.
That will mean that the majority of newspaper sites (with the big
exceptions of Gannett, Tribune, the New York Times and the Washington
Post, among others) will see critical parts of their business powered by
Microsoft. (Peter Krasilovsky notes that this deal, in the works before the MSFT/YHOO deal was done, may raise some political issues between the would-be partners.)

We all see the shape of the new battle for local ad dollars. Face
it, online newspaper growth has slowed dramatically. We're seeing
reading patterns harden in the marketplace, and it's leaving newspaper sites underwhelmed. Yes, they can claim as Advance does -- "according to Media Audit,
five of our sites rank in the top 10 of newspaper affiliated sites based
on local penetration of adults 18+" -- to be strong locally. But time on site across the news industry is paltry, less than 12 minutes a month in most cities, according to Nielsen data.
That means they must sell much more than tired old banners on their own
sites. The solutions, here and in the Yahoo consortium: 1) sell more
products, in addition to display; and 2) sell Other People's Inventory
and networks; in Advance's case, Microsoft's.

As I've noted, this new math is compelling -- many smaller advertisers never could afford print. They can afford online, and that means the potential of hundreds and thousands of new customers in every metro marketplace.

Further, this is a market newspaper companies must win if they have any hope of maintaining their already-downsized newsrooms. They're not winning it now. According to Borrell Associates, roughly half of the $14 billion local online ad market is going to the pure plays -- Google, Yahoo, Microsoft, AOL and smaller sites without legacy media businesses. Only a quarter of it is going to newspaper companies. Newspapers' strength is in non-targeted display advertising; they're minor players in the fastest-growing online ad segments of paid search and direct marketing.

If Advance and other newspaper chains see the local opportunity, they aren't alone. Yellow Pages
companies, with their own veteran feet, see it, as witnessed by the
recent ATT/Yahoo tie-up. (Content Bridges" "5000 New Competitors Just Landed in News Markets."
Broadcasters see the new markets opening as well -- all those small businesses
that used to be "too small to sell", businesses that have gotten a
taste of self-service keyword advertising, but would like some help in
putting together better, smarter campaigns. Both YP and broadcast
companies are part of the Microsoft reseller program that Advance just
joined, in fact. Conversely, Weinberger notes that with the new
programs "we can go after broadcast dollars."

July 29, 2009

The biggest story of the Microsoft-Yahoo search deal for newspaper companies: What the deal doesn't include.

In a full-blown merger of the companies or even a broader partnership, the more than 30 U.S. newspaper companies in the Yahoo Newspaper Consortium -- more than half of the country's press by Sunday circulation -- might have seen some major impacts. With the deal, finally announced this morning, limited largely to search, that impact is minimized.

In fact, the greatest impact may be addition by subtraction. Newspaper companies like being able to sell Yahoo.com inventory, a key part of the consortium deal. They are also figuring out how to purpose the Yahoo APT behavioral-targeting technology to better sell their own site inventory. What they haven't liked is the uneven implementation they've seen from Yahoo, a company making its first major foray into the Vendor Land.

So if the deal gets DOJ approval, if it gets done "early next year," then, maybe Yahoo will focus more on the business that is key to Yahoo's -- and its newspaper partners' -- future: BT-driven display advertising.

"We would expect that with Yahoo now focused on display advertising, the response [to newspaper company needs] should be stronger," Mike Silver, the Newspaper Consortium's executive director told me this morning. "We would expect more resources....Yahoo has been open on its calls that it underestimated what it would need to do on APT."

Search advertising does have an impact on newspaper companies. Most consortium members take Yahoo search and paid search, both services that would be replaced by Microsoft's new Bing and related products. The newspapers' paid search deal with Yahoo has provided a steady, if small, revenue stream -- guaranteed -- over the first couple of years of their agreement. Last I have heard, not too many had exceeded that guarantee. So when Microsoft replaces Yahoo search, which will give it a roughly 30% share of search combined, perhaps it can drive higher search pricing. Google, though, is clearly still the big dog here, so don't expect a lot of new revenue in this developing paid search duopoly world.

What the deal doesn't include is Microsoft's usage of Yahoo APT; the companies have said they'll go their own ways in selling display advertising. That's a missed opportunity, potentially, for newspapers. As they perfect the art of selling Other People's Local, it would have been good to be able to sell Microsoft local as well.

What the deal doesn't include is HotJobs, still being shopped by Yahoo, and still a major revenue driver for many newspaper companies. Lucrative recruitment packages, though clearly hurt by the recession, have contributed as much as half or more of Yahoo-related revenue for some of the companies.

What the deal doesn't include is more traffic generation, a good Yahoo benefit, as it gives preference to newspaper content. No Microsoft preference in this deal.

Of course, all of this could have been worked out quite differently if newspapers had ever really been a search player. They missed that boat, though, several times.

They mistook the web for a browse medium early on. Then, the old troika of TKG (Tribune/Knight-Ridder/Gannett) almost got into the search business, coming close to closing a deal for Kanoodle, a search player that they wanted to make their own and industry-wide solution. They walked away from the deal at the last minute, though, fearful they were overpaying for a slice of what has turned out to be a $10 billion plus ad segment (paid search alone). So instead, today, they find themselves bystanders, watching from the sidelines as two of behemoths mate.

June 08, 2009

Things are turning ugly. Globe staffers up the ante in Boston. John Carroll calls Sam Zell an idiot. Online ads on newspaper sites drop to double-digit negatives. Which leaves me, as we approach this summer of our discontent, with more questions than answers. Here's Nine:

1. Down the road, will the Globe Guild members like their new owners better than the New York Times Company? Certainly, the Globe's sense of loss is understandable -- and real. Still, it's intriguing to compare the Globe Guild's rejection of the Times' offer to the Portland Guild's recent partnering with venture capitalists to take Maine Newspapers down a new road. The Maine Guild accepted givebacks to get the deal done, and to get a share of the company. My sense: It's always easier to be enthusiastic about the new, unknown guys than the management you've dealt with for years, even it is the New York Times.

2. Where will lenders -- the new owners-to-be of bankrupt newspapers like the Tribune and the Inquirer -- turn for new leadership? They've got old-time publishers to choose from -- lots of them in the market -- as they replace the entrepreneurs like Sam Zell and Brian Tierney who fatally entered the trade in the last several years. They've got broadcast people, borrowing a page from Zell's playbook, as inevitably newspaper and local broadcast operations do grow together. They've got their pick of ad veterans, if they smartly see that local media success is going to be dependent on inventing scalable digital businesses.

3a. Won't Connecticut Attorney General Richard Blumenthal's okay of Tribune's merged TV/newspaper operations in Hartford seem quaint fairly soon? Sure, the FCC-related value of diverse community voices is a good idea. Going forward, though, the divide between local news video and local story/blog writing creation is an artificial one. Bottom line: The marketplace will probably take care of local news diversity rather than the increasingly outmoded rules of Old Media.

3b. Aren't we finally able to put a pricetag on Sam Zell's unwarranted optimism and hubris? It looks like his $250 million "loan" to Tribune will be wiped out in the bankruptcy, as will his $90 million warrant. Still, it's just pin money for the guy who sold his real estate investment trust for $36 billion in 2006 and knows enough -- endowing the Zell Center for Risk Research at Northwestern -- to make judicious bets.

4. While the San Diego News Network (Chris Jennewein's new hangout) is hardly a commercial threat yet in San Diego, the cratering of the Union-Tribune -- a one-time employer of 1422 people that will soon be paying only 572 850 -- leads to this question, in San Diego and elsewhere: How big a marketplace hole does a disappearing daily leave in its wake? My guess is that with an economic recovery, we'll see lots of small-shop entrepreneurs aiming to pick up local merchant dollars now in flux.

5. Why would anyone expect the Kindle to "save" newspapers when it hardly supports advertising and takes 70% of subscription revenue?

March 19, 2009

PI print readers woke up Wednesday morning to find their daily paper replaced by mere pixels....and Tweets. The online-only PI, seeking to define Second Life anew, added a Twitter feed to its home page. "Seattle Tweets" captures a few Twitter microposts, this afternoon heavy on TV station tips to whale video. Hey, it's the Northwest.

Reporting that its daily pageviews have grown a bit to 1.9 million on its first of school, from an average of 1.7 million pre-switchover, the new PI is heavy on blogs Seattle 911 (crime), Seattle Sports Blog and The Big Blog (a lively pastiche of local culture and news), a smattering of breaking news and featured photos. An easy-to-launch live March Madness CBS is featured the top of the page. A personalizable mypi down the right rail. Lots fewer PI stories, of course, with the reporting staff gone.

Many AP stories, some of them regional/local (which may ironically show AP's ramping value to shrinking newspaper companies).

And: no links (today) to the Seattle Times or the more direct media competition, Seattle Weekly, The Stranger, and Crosscut.

Yahoo HotJobs has already been plugged in as the jobs site, through Hearst's involvement in the newspaper consortium. Autos is a link to Kelley Blue Book, real estate is mainly (archival) editorial for now.

Amid the maelstrom of change, I asked Michelle Nicolosi, who heads the site, to answer some basics. She's the Executive Producer of the new PI, and you can see from her resume, she's been around the online newspaper world.

Day 2, here's a sense of what's inspired her, how she hopes to distinguish the site her online philosophy and how her 20-person staff will do the new journalism:

Q: Which sites -- newspaper or non-newspaper -- do you look at for inspiration or as models?

A lot of ideas come from looking at all the cool new tools that are constantly being developed, and sitting back and thinking, ‘hmm, how can I use that?’ Google Reader inspired me to ask some of our staffers to start creating "what I'm reading" headline lists that we surface on their blogs. Cover it Live gave us a new way to run conversations online. Twitter's been a great addition to the tool kit—we're using it to surface a running narrative of what's happening now across the city by creating a combined Twitter feed from the Tweets of 15 or so local agencies and leaders. I love to run through the winners of the Webby Awards and the SND online awards every year, there are always great inspirations there. The Guardian and The Sydney Morning Herald have always been two favorite sites to look to for innovations and inspiration. The New York Times is incredible of course, and I love El Pais.

Q: Much has been made of your linking to Seattle's main non-newspaper sites and perhaps following a strategy of becoming a central point of regional aggregation. How central to your strategy and operation will linking out be and how have those sites responded to the move?

Our mission is to be the best source of news in information in the Northwest—to put together the best mix of content for our readers. We'll do this by producing lots of original content, but we'll also point offsite to great content by other publishers. Refusing to tell readers about stories we didn't write feels kind of old school to me. We know what our readers are interested in. Why not put together the best mix, regardless of where the stories came from, and who wrote them—so long as the sources are credible, of course. Linking to other credible content of interest will make us more useful to our readers.

Q: If PI is a regional aggregator, why are there no links to Times stories specifically and to Seattle Weekly, Crosscut, The Stranger. Are you defining linking as all but competitive media?

We're linking to all credible sources -- if you're not seeing it there right now, that just means it's not in the mix at the moment. That doesn't mean we're not linking to them. In fact, we linked to The Stranger the very first day we started doing this.

Q: How do you compete with a direct (newspaper) competitor, The Seattle Times, which now will have 10X the staff resources? We’re going to focus on what readers are telling us they want and on what makes seattlepi.com essential and unique—within the context of our local news mission, of course. We’ve been successful thus far by paying close attention to our readers and will continue our “survival of the fittest” attitude about content that isn’t working.

We have partner content from TV Guide.com, business publisher Xconomy.com, and starting today, a lot of great new content from Hearst magazines, including Cosmopolitan, Country Living, Esquire, Good Housekeeping, House Beautiful, Marie Claire, Popular Mechanics and Redbook. We'll continue to develop partnerships like these as we go to create the best possible mix of news, information and entertainment. As I already mentioned, we're putting together a more useful home page that points you to the best mix of news, regardless of who wrote it. We're going to have a great assortment local leaders joining seattlepi.com as columnists. We've got dozens of folks ready to write for us now, and hope to keep expanding.

We have a collection of more than 150 reader bloggers, sharing their passions and stories. We've got one of the best video game reviewers going blogging for us, and wonderful people writing about everything from politics to cooking to dating to living with cancer.

Q: How traditionally story-driven and how blog-driven will the site's content be?

We'll still write stories, of course. We'll also write a lot of
briefs and quick updates. Being online-only means we won't always have
to write a full story when there's an update—instead we can point
readers to previous coverage for the background. In the paper you can't
do that.

We're going to be doing both, depending on what's appropriate for the
subject/circumstances. Last night for example we live-blogged a school
board meeting (in the blog tool)
then wrote a story and published it as an article.

We'll
focus our staff efforts where we have something unique and civically
important to offer: coverage of government, spending, crime, and harder
news in general. A recent survey of our readers—and traffic patterns on
seattlepi.com—tell us that readers are most interested in breaking news
and hard news stories. They’re also interested in both news and feature
photo galleries. The ‘daily news of the world in photos’ gallery is one
of the most popular features on seattlepi.com.

March 18, 2009

So Bruce Sherman's out of the game. Failure apparently has its price, eventually.

You remember Bruce, the anonymous-to-newspaper-people fund manager. He's the guy who pulled the plug on the newspaper industry's sense of normalcy, setting off a chain reaction of events that remain with us to this day.

As co-founder of Private Capital Management (PCM Management), a Naples-based division of Legg Mason, Sherman took a long long at Knight-Ridder in 2005, and didn't like what he saw. He thought management could be managing better. He let Tony Ridder know that, but didn't see the changes he wanted. So he said: I think we could do better. I think we should sell the company.

Amazingly, Tony Ridder blinked, Knight Ridder was sold -- at a price of $67.25 a share (cash and stock), a number that not yet three years later is mind-blowing.

That sale -- at 9.5 times KR's 2005 cash flow -- marked the beginning of the end for public newspaper companies. Knight Ridder -- the second-largest newspaper company in the US, with plum properties across the country -- could only find one bidder, McClatchy. McClatchy CEO Gary Pruitt then quickly turned around and sold off a dozen papers, including Bay Area properties to Dean Singleton (iconic photo of the two of them here), but still rues the day he made the KR buy.

Numerous buyers reviewed KR books. They were newspaper companies, private equity and more. All but McClatchy came to the conclusion that the business had serious cracks. Those cracks now have all been exposed as the Tribune tumbled into faux "employee ownership" and then bankruptcy, and company after company have seen for-sale signs unanswered. Today, the San Diego Union-Tribune went, at an undisclosed price, to an L.A. private equity company, after nine months on the market.

When I saw the Sherman announcement, I thought back to the day in November, 2007 when I got an unexpected call from Naples. I answered and heard, "Mr. Sherman's office calling for Ken Doctor." Was it a prank, a lion of private capital calling an independent analyst?

March 03, 2009

Make 'Em Pay! Sounds like a old Clint Eastwood movie. Now, though, it's the theme of the newspaper industry month. We can't blame the industry for trying new tacks; that's only to be encouraged in the time of ransacked newsrooms.

Cablevision's Newsday/cable idea: I pooh-poohed the paid Newsday notion, when it first leaked out last week. Putting up a pay gate around a site that draws 4.5 minutes per month per average visitor just isn't a good idea. From Cablevision's furtive comments, we can now divine that it meant to say it would somehow bundle Newsday as a cable offering, details to come. As Peter Kafka over at AllThingsD haspointed out, this idea may have more appeal for its ad value than its news value. The big new idea here, though, could be an old, tweaked one. Bundling! Imagine bundling Newsday online access in with Cablevision's cable bills all over Long Island. If you've actually looked at your cable bill lately, you know it's undecipherable. Cablevision -- owner of Newsday -- could peg any amount it wanted to Newsday value, call it an information access charge or whatever, and attribute the money to ..... Newsday. Sound familiar, maybe a bit like, the early days of classified bundling (the '90s), in which newspapers attributed whatever they wanted out of a recruitment/auto/real estate print buy to online. The trick here would be for Cablevision to continue raising rates to make the "bundling operation" really profitable for the whole company, and not just a shell game.

Odds of Happening: 2-1.

Impact: Great model....if you are a cable
company that owns a newspaper. Would Comcast like to pull Tribune out
of bankruptcy?

2. Hearst's e-paper idea: Hearst's Interactive Media President Ken Bronfin piqued imagination last week with news that the company has developed a "wireless e-reader with a large-format screen." As with the Cablevision word, we know little more so far. Jeff Bezos' pet Kindle and lately PlasticLogic's to-be-released-in-2010, oh-so-cool bendable screen (good informative piece by Emma Heald here at Editors Weblog) have re-lit hopes that people will want to read newspapers on this new device, paying for them of course. We know Kindle has some thousands of buyers for newspaper products, at $10 or so a month.

Odds of Happening: 2-1.

Impact: Seems niche-y, rather than mass. Wireless sounds good, if it can update newspaper content on the fly. Otherwise, we're back to today's latest technology bringing you yesterday's news. Of course, even if it is the latest news, how many people want it in the newspaper format (As Steve Yelvington points out, this is the old Roger Fidler idea, late of Knight Ridder, updated by newer technology)? My problem with e-readers has been that by presenting news in the newspaper format metaphor, they appeal to baby boomers and up, who are habituated to the format -- but don't prefer to spend their time reading digitally. Additionally, for younger-than-baby-boomer readers, they're puzzled why you'd have a proprietary reader, when you already have a laptop or smartphone that can get you the latest on anything, and offers other usefulness.

Still,
the device does offer the promise of a Chiropractic Full-Employment Act, as we (to
use a USA Today-ism) all pack around so much digital garbage that our
backs are permanently swayed. Here is one of those great USA Today snapshots, published fortuitously last week, showing the e-burdens Americans tote around these days.

My sense is that the way Hearst may intend to make this work is as follows:

Give away the e-reader to subscribers, or discount it
substantially, figuring that the money saved from printing and
distributing a daily paper (or Hearst magazines) -- more than a quarter of the cost of producing it -- will be saved if Hearst can hold on to the subscriber.

Added Bonus: A new device to add to the Graveyard of Proprietary Devices, sure to be on one of the popular stops on the Silicon Valley 2020 Tour.

3. Hearst paid content idea: New Hearst News head Steve Swartz' leaked memo talks about charging for access to some online content, to be determined. Hearst execs have been told, since the announcement, not to erect any paywalls yet. In fact, they've been told to reach out and lasso more community content, another (better) idea newly regaining attention all around the country.

February 26, 2009

Want to know how likely it is that Cablevision's new charge-for-Newsday-online will work? A few rational arguments to follow, but consider this number: The average unique visitor on Newsday.com spends four minutes, 25 seconds per month on the site. Ouch. That number can sub for lots of focus groups, price elasticity testing and the like. Newsday's would-be digital audience has voted with its fingertips. That number is up almost one minute from a year earlier, here courtesy of E and P's monthly Nielsen rankings, but still ranks Newsday as having the lowest online engagement of the top 30 newspaper sites.

Confronted with having to pay for a site you may use less than five minutes a month, you think you are going to pay for it? Wrong site. Wrong year. Wrong metro area.

It will be fun to watch though, since we all needed another case to chew on. Our best case has been
Little Rock. Yes, the
Democrat-Gazette has done better than average in circ retention, but it is
still laying off dozens of people this week. It has applied a
tourniquet and that only helps for awhile when you have an internal
hemorrhage. They've been able to keep circ better because it is Little
Rock, with far less competitive media, and it is the big dog in the
state.

Long Island is no Little Rock. In New York, Newsday faces strong competition from the three
other dailies plus dozens of local websites. Much of its coverage, in
print and online, can be readily found for free elsewhere on
the web. So assuming, it gives free, or next-to-free access to its
print subscribers, it is unlikely to pick up much new revenue from
non-subscribers who can go elsewhere. Similarly, I don't think it's a
strong retention device for holding to print readers, though it may
work there to some degree for the short-term.

To be more successful,
Newsday would need to shift its model to being more hyper-local about
Long Island, rather than bringing the world to Long Island, and it
doesn't show much signs of doing that.

Cablevision swung for the fences with the $650 million (now written-down) purchase. It tried to parlay the industry triple play (cable, Internet, telephone) into a Home Run. This new move seems to be another attempt to swing for the fences, after apparently whiffing on the dreams of internal synergy that have upended so many media companies. Right now, it looks like you'd have to score the Cablevision auction "victory" over Rupert Murdoch and Mort Zuckerman as a strike out at the end of the ninth inning, but we'll get ready for the second game of the doubleheader.